The four projects to be built and operated on the tributaries of the Siom river, in West Siang district, are: Heo (90MW), Hirit (84MW), Tato (80MW), and Pauk (50MW). Concessions are for 40-years following the commencement of operations, planned for 2012.
Velcan said that the concessions were secured in Arunachal Pradesh by its wholly owned subsidiary Velcan Energy Holdings (Dubai) Ltd.
The company said the projects would be funded by a combination of project finance and Islamic ‘sukuk’ finance – which securitises against fixed assets, and that the funds should be secured in Dubai.
A condition of the concessions will see the state of Arunachal Pradesh receive 12% of total electricity production.
Velcan has recently become active in hydro projects in India and Brazil. Recently, two of its other wholly owned subsidiaries were each granted a 30-year concession to develop a 25MW project in Orissa state. The Bhimkund and Tarini projects will be built on the same river for the ‘Baitarani’ project, and built over 2009-2011.
The company said that it was considering using the ‘sukuk’ financing instrument for future projects in India as the focus on securitising capital with fixed assets was ‘ideally suited’ to utility projects.
Shortly before Velcan achieved its initial success with hydro in India, the company has success in Brazil with two 30-year concessions for a total of 74MW capacity – the 60MW Rio das Mortes and the 14MW Rodeio Bonito schemes.
Velcan said it has more than 3GW of projects under evaluation, principally hydro. Its focus is on developing plants in the 50MW-100MW range, and said that over the lifetime of concessions it expected approximately 5% of the firm’s revenue to come from trade in carbon credits associated with renewables schemes.
